New Tennessee laws tightening jobless benefits

New Tennessee laws tightening jobless benefits

May 13th, 2012 by Andy Sher in News

Tennessee Gov. Bill Haslam

Tennessee Gov. Bill Haslam

Photo by Associated Press /Times Free Press.

NASHVILLE -- Some Tennesseans could find it harder to get or maintain unemployment benefits under three bills that Gov. Bill Haslam signed last week.

Republican Senate Speaker Ron Ramsey and GOP colleagues say the changes help employers create jobs and also protect the state's unemployment trust fund.

It does that by tightening what proponents say are lax rules, discouraging abuse and spurring jobless workers already in the safety-net program to get new jobs more quickly.

"It will protect the integrity of the process yet at the same time make sure that those who truly need the benefits will get the benefits," Ramsey said last week as Haslam, a fellow Republican, signed the legislation.

Unemployment compensation is intended to be "a benefit and not a lifestyle," Ramsey said.

According to the state's Department of Labor and Workforce Development, the state had an unemployment rate of 7.9 percent in March, meaning 244,473 Tennesseans were unemployed. Those eligible can receive benefits of up to $275 per week.

Democratic critics worry that some provisions in the three bills could empower unscrupulous employers to take advantage of workers and unfairly move to deny them state benefits when they are laid off or fired.

"I see some potential for abuse," said Rep. Gary Moore, D-Nashville, who is president of the Tennessee AFL-CIO Labor Council.

The main bill, called the "Unemployment Insurance Accountability Act of 2012," toughens the definition of misconduct that employers can cite as legitimate grounds for dismissal. People who are fired for cause are not eligible to receive benefits.

They now include "conscious disregard" of the rights or interests of employers, deliberately violating reasonable standards of behavior, disregarding written standards for showing up to or leaving work, or violating rules.

Those collecting unemployment benefits must prove using detailed information that they have contacted at least three employers a week or demonstrate they have been to a state career center.

The state Department of Labor and Workforce Development is required to conduct 1,000 random audits weekly to ensure compliance.

The law also lets state officials deny claims to workers who reject what officials consider valid job offers or who fail or refuse to take employer-mandated drug tests.

One of the most controversial provisions pushes those receiving benefits into taking jobs that pay less money than the worker's prior employment.

For example, after 13 weeks of unemployment benefits, jobless workers are required to accept "suitable work" at 75 percent of their former pay or face termination from the program.

After between 26 to 38 weeks, recipients are obligated to take "suitable work" paying 70 percent of their former salary. After 38 weeks, the threshold falls to 55 percent.

That provoked concerns during the House debate from Rep. Mike Stewart, D-Nashville, who cited a machinist who earned $15 an hour but now faces taking a $9.75 an hour janitorial job.

"Won't that basically force a lot of Tennessee families to kind of leave the middle class?" Stewart asked the bill's sponsor, Rep. Jimmy Matlock, R-Lenoir City. "Aren't we saying to people, 'Instead of going out and trying to get your new job using your skills as a machinist, you've got to actually take a major pay cut or you're going to lose your benefit?'"

Matlock, who was named last year by House Majority Leader Gerald McCormick, R-Chattanooga, to head a jobs task force, said the purpose is "not to force anyone out of a class."

"We're for building them up to a higher class," Matlock said. "We have career centers in our state that help with job training."

While acknowledging what Stewart said is "certainly a possibility," Matlock said "our hope is that individuals would recognize that after so many weeks of being unemployed, 'I've got to take something.'"

"Our intent is to help motivate where we can and train where we should," he said.

The second bill tightens definitions for "seasonal employment." Backers say it prevents workers from seeking unemployment benefits if they knew their job would last only part of the year.

The program is optional for employers.

The third bill makes it easier for employers to challenge benefits awards.

All three bills passed by large margins.

Ramsey said last week that many company owners and managers complained to him about the state's unemployment system during his "Red Tape" tour last year, where he talked to employers about ways to promote job growth.

They cited cases in which jobless workers refused offers of work while collecting benefits. Some complained about workers they fired for theft or chronic absenteeism being approved for unemployment benefits, Ramsey said.

Taxes employers pay to maintain the trust fund went up substantially as the number of jobless soared to more than 10 percent during the recession and its aftermath.

Haslam called the legislation something "that got better through the process," and he complimented Ramsey, who he said "brought forward the idea and brought it to the finish line."

"And protecting benefits for the people who deserve them is a really important thing we do," Haslam said.